The Impact of Tonnage-Based Taxation: Evidence from the Hellenic Shipping Sector

A. Giannopoulou, A. Triantafillou, G. ZombanakisDepartment of Economics
Deree – The American College of Greece

When: Monday, September 26, 15:00 – 15:50

Where: Deree Faculty Lounge

Organized by: Faculty Research Seminars 2016-17 Series

Shipping and related activities account for over 7% of Greek GDP, rendering proceeds from shipping sector activities indispensable for the Greek economy, especially at a time of an ongoing crisis. The contribution of this study centers round measurement of the mitigating consequences of an increasingly uncertain taxation and funding environment upon net receipts from shipping activities. Using data for 2002-2015 and employing the General Method of Moments, we find a coefficient of elasticity of net receipts from shipping activities with respect to taxation of -0.55, implying a 15% reduction in net shipping inflows due to higher taxation from 2014 to 2015. Moreover, net receipts from shipping activities are found to be significantly affected by the restriction in bank loans to the shipping sector. The policy implication that follows is that the pioneering tonnage-based taxation framework of Greece, which has been in place for more than half a century and has contributed to securing Hellenic Shipping a 50% market share in the EU and 16.1% in the world, requires no revision. On the contrary, in terms of an ex post assessment, the competitiveness advantage it granted for the Greek economy suggests that the philosophy behind the Greek taxation system should be extended to apply for the entire EU sea transportation sector.

Annie Triantafillou received her PhD from the University of Manchester in the UK in December 1992. She has been teaching at the Economics Department of Deree – The American College of Greece since June 1993. Dr. Triantafillou has been teaching both undergraduate and graduate courses in the areas of macroeconomics in general and financial economics in particular, including banking, monetary theory, portfolio theory, and risk management. She was Head of the Department of Economics and Social Studies during 2005-08 and MS in Finance Program Coordinator during 2006-09. She held the post of the Assistant Dean of the School of Arts and Sciences from December 2007 to December 2009 and the post of the Associate Dean of the School of Arts and Sciences from January 2010 to August 2011. Starting September 2014 she is the Dean of the School of Business. Dr. Triantafillou was a weekly columnist for the financial newspaper KERDOS from March 1999 to April 2011. She is an applied economist and her current research interests relate to real estate, shipping finance, and corporate governance. Her research has been published in Transportation Research, Maritime Economics and Logistics, European Research Studies, Applied Financial Economics, Journal of Applied Business Research,Journal of Economic Asymmetries, and Research in International Business and Finance.